Correlation Between Skandinaviska Enskilda and Klimator
Can any of the company-specific risk be diversified away by investing in both Skandinaviska Enskilda and Klimator at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Skandinaviska Enskilda and Klimator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skandinaviska Enskilda Banken and Klimator AB, you can compare the effects of market volatilities on Skandinaviska Enskilda and Klimator and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Skandinaviska Enskilda with a short position of Klimator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skandinaviska Enskilda and Klimator.
Diversification Opportunities for Skandinaviska Enskilda and Klimator
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Skandinaviska and Klimator is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Skandinaviska Enskilda Banken and Klimator AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klimator AB and Skandinaviska Enskilda is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Skandinaviska Enskilda Banken are associated (or correlated) with Klimator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klimator AB has no effect on the direction of Skandinaviska Enskilda i.e., Skandinaviska Enskilda and Klimator go up and down completely randomly.
Pair Corralation between Skandinaviska Enskilda and Klimator
Assuming the 90 days trading horizon Skandinaviska Enskilda is expected to generate 2.99 times less return on investment than Klimator. But when comparing it to its historical volatility, Skandinaviska Enskilda Banken is 2.02 times less risky than Klimator. It trades about 0.05 of its potential returns per unit of risk. Klimator AB is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 128.00 in Klimator AB on September 3, 2024 and sell it today you would earn a total of 70.00 from holding Klimator AB or generate 54.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skandinaviska Enskilda Banken vs. Klimator AB
Performance |
| Timeline |
| Skandinaviska Enskilda |
| Klimator AB |
Skandinaviska Enskilda and Klimator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skandinaviska Enskilda and Klimator
The main advantage of trading using opposite Skandinaviska Enskilda and Klimator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skandinaviska Enskilda position performs unexpectedly, Klimator can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Klimator will offset losses from the drop in Klimator's long position.| Skandinaviska Enskilda vs. Nordea Bank Abp | Skandinaviska Enskilda vs. Skandinaviska Enskilda Banken | Skandinaviska Enskilda vs. Swedbank AB | Skandinaviska Enskilda vs. Avanza Bank Holding |
| Klimator vs. Truecaller AB | Klimator vs. eEducation Albert AB | Klimator vs. ChargePanel AB | Klimator vs. CodeMill AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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